02-05-2025
UAE restaurants turn to AI, ghost kitchens to counter soaring rents and evolving consumer tastes
The United Arab Emirates' hospitality sector is increasingly deploying technology to boost the efficiency of restaurant operations as rising rental costs in cities like Dubai push business owners to opt for more economically viable options like food halls and ghost kitchens, experts said.
This comes as the wider MENA region witnesses a major transition in the industry with AI-enhanced kitchens, data analytics and more.
'Restaurants in the UAE – as also throughout the Middle East – currently are in the midst of a new-age tech-enabled transformation, increasingly utilising AI-powered tools, automated ordering systems, and contactless payment methods to optimise their operations and improve customer satisfaction,' Alexander Ponomarev, CEO of Syrve MENA, a leading provider of restaurant technology in the region, told Arabian Business.
'Digital menus, AI-enhanced kitchens, and advanced data analytics are revolutionising restaurant operations and guest interactions,' he added.
Ponomarev said advanced data analytics – one of Syrve MENA's core offerings – is something many of the restaurants in the region are already actively using to optimise performance and gain deeper insights into customer behaviour.
Senior industry executives, while confirming the tech-enabled changes in the sector, said the region's upscale dining scene, meanwhile, is setting new benchmarks for exclusivity, personalisation, and sustainability, as travellers seek curated, culturally rich culinary experiences.
UAE's themed restaurant wave
Restaurateurs are also wooing the young and young-at-heart with social media-oriented immersive dining experiences, carrying hefty price tags of AED1,800-per-head ($490) or thereabout, featuring interactive dining setups, uniquely themed environments and multisensory activities to offer shareable, Instagram-worthy moments.
The sector is also seeing a growing trend towards social dining experiences, peppered with games or trivia nights amidst the rising expectations of diners to turn eating into an event.
Industry players said the hospitality sector in the UAE and the MENA region is increasingly seeing a rising demand for immersive dining experiences that offer unforgettable journeys that engage all five senses.
In response, innovative restaurateurs are coming up with new concepts, featuring interactive dining setups, uniquely themed environments, and multisensory activities that particularly appeal to younger generations looking for shareable moments on social media, they said.
'For restaurants, crafting these Instagram-worthy experiences not only sets them apart from competitors, but also attracts crowds eager for memorable moments beyond traditional dining,' a sector expert said.
Ponomarev said Syrve's MENA client, Krasota, offers an AED1,800-per-head immersive dining experience in Dubai, ensuring personalised menu adjustments based on diner preferences captured via digital surveys.
'Similarly, 'Our Hidden Worlds' utilises projection mapping – featuring 360-degree sound and physical art to create magical worlds – to transform dining spaces into dynamic environments, such as pairing oceanic themes with seafood dishes,' he said.
The Syrve MENA chief executive said many diners now expect engaging, social, and often gamified experiences that turn eating into an event.
The trend is also manifested in a survey by 'the bottom line', in which approximately 31 per cent of customers expressed interest in participating in restaurant games or trivia nights, underscoring the desire for engaging social experiences that extend beyond just food.
Rising real estate, rental costs force major shift in business models
Sector experts said there is also a major shift in business models currently underway in the region's hospitality sector, which is seeing many industry players changing their operational models by switching over to ghost kitchens and food halls in the wake of changing economic situations and rising real estate costs.
Cloud kitchens offer a strategic advantage in the high-cost real estate markets of the region, they said.
Ponomarev said ghost kitchens offer an economically viable alternative for food entrepreneurs, especially in locations like Dubai, where retail rents rank among the world's most expensive, according to Knight Frank research.
Food halls, on the other hand, offer cluster-oriented models in designated locations for eating out, inviting large-scale footfalls, while cutting operational costs for units.
He also cited the example of The Hub by Social in Masdar City, representing the evolution of food halls in the region.
The over 32,200 square foot destination offers a diverse range of cuisines, including Asian, Indian, Italian, American, and Mexican, creating a vibrant community space that serves as more than just a dining venue.
Industry executives said the new models are expected to enable restaurant owners and operators to navigate the shifting economic environment and adapt to the rapidly changing restaurant landscape.
Embracing the latest trends is not just about keeping up—it's about leading the way in an industry where innovation is the norm, they said.
The rising trend of immersive dining experiences and shifting operational models are underway at a time when the MENA food service market is poised for impressive expansion, with projections to reach $190 billion by 2032 from the expected $100 billion this year.
The surge in growth is fuelled by the thriving tourism sector, especially in the UAE, Qatar, Egypt, Iran, and Saudi Arabia, where both private and public entities are actively pursuing strategies to broaden the tourist demographic beyond just religious and corporate visitors.
